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Looking at the market over the past few days, volume has disappeared - even more so than the levels where the talking heads were worried. It seems to us that everyone is waiting on the Fed, with only the stocks that the computers like to trade keeping their volume near their three month daily average. Commodities stocks have seen their volume dry up just as much so as the general market so we are definitely at a crossroads. All eyes are upon Wyoming and Bernanke, hopefully he does not shy away from the spotlight and leave us all hanging and grasping for more details.

Oil & Natural Gas

BP Prudhoe Bay (BPT) has seen shares get clobbered since an article in The Wall Street Journal which highlighted the insane multiple that some trusts trade at based upon their Net Present Value. The Trust hit a new 52-week low, but the revaluation is not over as these units continue to trade above their true worth. Retail investors need to be careful so as not to get burned, and should remember not to seek yield for yield's sake alone. You do not get your invested capital back when these things mature and the distributions are not enough to cover your cost these days, so one would do best to buy MLPs instead where it makes sense to reinvest distributions and let money sit over time (as MLPs can grow through acquisition).

With the hurricane season underway, and with the hurricane center thinking we will have between 10-20 actual hurricanes this year we think investors will begin to find the value in names such as Chesapeake Energy (CHK) which have all domestic production and all of their operations on land. They are not impacted nearly as much as these offshore operators and they have less risk in the exploration area due to their focus on shales. Although this storm did not cause much damage, the next one may and that is what investors need to be prepared for when investing in plays with exposure to offshore.

Refiners

Hurricane Isaac was kind to the Gulf coast, drenching and flooding it with water but winds sparing most of the immediate area. Most of the areas infrastructure was unharmed and the levee system held, although some levees were breached. The refiners appear to all have made it through the storm in one piece and appear ready to start back up soon. The quicker that these refineries can restart the less of an impact on gas prices Isaac can have, and that would benefit the US consumer and motorist as prices per gallon have increased about $0.15/gallon in our area over the past few days. Valero's (VLO) refinery in the area is being reported as appearing to be fine this morning from reporters on the ground.

Rare Earths

Molycorp (MCP) rose another $1.48 (13.77%) to close at $12.23/share on volume of 23.8 million shares after Gabelli & Co moved Molycorp from a Hold to a Buy. We are still skeptical of the company's claim of HREE production near-term and based on what we know of the industry this seems almost inconceivable - especially here in America. If it works, then it will be great for shareholders, but start-ups of mines never go according to plan and we would expect some types of delays with 3 months being the minimum.

Iron Ore

Not to pile on, but we have watched Vale (VALE) for some time now and arrived at the conclusion not to buy and that seems to be the consensus now. Shares continue to fall, another $0.46 (2.78%) drop yesterday in fact, and sit at a new 52-week low now. China's stock market is at its lowest level since early 2009 and just shows how negative things have gotten over there. Don't be duped by the high yield here, but rather keep a watchful eye on shares and buy if you believe that the news indicates renewed global economic growth.

Source: 5 Commodity Stocks Moving On News